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Moweno v Stratis

Moweno v Stratis

Case [2002] NSWSC 1151 2 December 2002

Contract Formation

Adverse Possession

Easements & Covenants

Property Law

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Reported Decision:
(2003) NSW ConvR 56-050

New South Wales

Supreme Court

CITATION: Moweno v Stratis [2002] NSWSC 1151

CURRENT JURISDICTION: Equity Division

FILE NUMBER(S): SC 4685/01

HEARING DATE(S): 21/11/02

JUDGMENT DATE: 2 December 2002

PARTIES :

Moweno Pty Limited - Plaintiff
Stratis Promotions Pty Limited - Defendant

JUDGMENT OF: Barrett J

COUNSEL : Mr A M Colefax - Plaintiff
Mr C M Harris - Defendant

SOLICITORS: Colin Biggers & Paisley - Plaintiff
Clinch Neville Long - Defendant

CATCHWORDS: LANDLORD AND TENANT - retail tenancies legislation - whether variation of existing lease may itself be "retail shop lease" - determining purpose of right of occupation - whether actual use as distinct from agreed use relevant - construction of user covenant

LEGISLATION CITED: Retail Leases Act 1994

CASES CITED: CAC Pty Ltd v Diamond Hill International Pty Ltd (1996) 7 BPR 14,754
Kanittha Ninubon v GAG Pty Ltd [1998] NSWSC 298
Randi Wixs Pty Ltd v Pokana Pty Ltd [2002] NSWADT 205
Thompson v Easterbrook (1951) 83 CLR 467

DECISION: See paragraph 33

- 3 -

IN THE SUPREME COURT
OF NEW SOUTH WALES
EQUITY DIVISION

BARRETT J

MONDAY, 2 DECEMBER 2002

4685/01 – MOWENO PTY LIMITED v STRATIS PROMOTIONS PTY LTD

JUDGMENT

Background

1 The plaintiff is the owner of premises at 588-590 Princes Highway, Rockdale. On or about 24 August 1998, the plaintiff granted to the defendant a lease of the first floor of those premises for a term of ten years commencing on 1 February 1999. In January 1999, the lease was varied. By its amended summons filed on 31 January 2002, the plaintiff claims a declaration that, upon its proper construction, the lease “is not a retail shop lease within the meaning of the Retail Leases Act 1994”. At this stage of the proceedings, that is the only issue the court is called upon to determine.

2 Both the plaintiff and the defendant led evidence. I shall turn to it in due course. First, it is appropriate to examine the Retail Leases Act 1994 to discover the processes that must be engaged in to determine whether a particular agreement is a “retail shop lease” within the meaning of that Act.

The Retail Leases Act

3 Section 3 of the Act contains the following definition:

Note.

Section 6 limits the retail shop leases to which this Act applies.

4 Several features of this definition may be noted. First, any “agreement” of the relevant description is within the “retail shop lease” concept, whether or not it is (or contemplates)…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Moweno v Stratis

Details

AGLC: Moweno v Stratis [2002] NSWSC 1151
Case: [2002] NSWSC 1151
Decision Date: 2 December 2002

CaseChat Overview and Summary

The case of Moweno v Stratis involved the landlords, represented by Moweno, and the tenant, Stratis. The landlords sought to determine whether a variation of an existing lease could be considered a "retail shop lease" under the Retail Tenancies Act 1994 (NSW). Moweno argued that the variation, which allowed Stratis to use the premises for activities other than those originally agreed upon, did not constitute a retail shop lease, while Stratis contended that the variation was valid and should be upheld. The dispute was heard by the Supreme Court of New South Wales.

The central legal issue before the court was whether the variation of an existing lease, which altered the agreed use of the premises, could still be classified as a retail shop lease under the Act. Additionally, the court had to decide if the actual use of the premises, as distinct from the agreed use, was relevant in determining the purpose of the right of occupation. The construction of the user covenant within the lease was also examined to ascertain whether it allowed for such variations.

The court determined that the variation in question did not constitute a retail shop lease under the Act. The variation altered the original purpose of the right of occupation, which was critical in classifying the lease. The court held that the actual use of the premises was relevant in determining the purpose of the right of occupation. Moreover, the court found that the user covenant did not permit the variation, as it restricted the use of the premises to retail activities as originally agreed. Consequently, the landlords were successful in their claim, and the variation was deemed invalid.

The final orders of the court were that the variation of the lease between the parties was not a retail shop lease under the Act and was therefore invalid. Stratis was required to cease using the premises for activities not originally agreed upon. The court also directed that the original lease terms be reinstated, and any payments made under the variation be refunded. Additionally, the court awarded costs to the landlords, Moweno, for the successful prosecution of the case.

Orders